Page 20 - Investment Advisor March 2021

PORTFOLIO PERSPECTIVES

By Jane Wollman Rusoff

Why Ace Stock Picker John Buckingham

Sees Value Shares Having a Good 2021

The longtime value investor discusses some of his stock picks for the year

and why he’s become optimistic.

edEx, CVS Health and Cisco
Systems: What do these three
Fstocks have in common? They
are value equities whose appeal has
been heightened by the coronavirus
pandemic. Also, they’re among top stock
picker John Buckingham’s favorite plays
for 2021.
With value stocks coming into vogue
again, value investor and perma-bull
Buckingham, principal and portfo-
lio manager of wealth management
firm Kovitz, and longtime editor of
The Prudent Speculator newsletter,
appears more optimistic about the
market than usual.
Buckingham, who has managed
investments for more than 30 years,
has been manager of the Al Frank Fund Please discuss your investing strategy. that, as well as some money coming out
since its inception in 1998. Through Dec. We’re value investors — trying to buy of bonds. There’s also a ton of money
31, 2020, it has posted an annualized things that nobody else likes; then, still sitting on the sidelines that’s look-
return of 10.16% versus the S&P 500’s when people fall in love with them, ing for a home.
8.06% and versus the Russell 3000 Value we [sell] those stocks at much higher The COVID-19 vaccine is the primary
Index’s return of 7.26%. prices. If CNBC is saying the market’s catalyst [for the rotation] because the
He spoke to Investment Advisor in turmoil and Jim Cramer tells you the economy will be doing better as we all,
from his Laguna Beach, California world is ending, that’s when you want hopefully, get vaccinated and the pan-
home, on Jan. 14, with email exchang- to mortgage everything and buy [value demic starts to fade.
es following. Here are highlights of stocks] because you’ll go against what [Value equities] still really attractively
our conversations: the masses are doing. priced relative to growth stocks.

What’s one unloved value stock you’re Is the market undergoing a rotation to Because of the GameStop short-
invested in that recently went up? value stocks? squeeze hysteria, the market saw sharp
John Buckingham: Over the years, we’ve It started last July. In 2020, a lot of sell-offs in early February. How did that
done extraordinarily well with Royal money piled into growth stocks; now affect your forecast?
Caribbean Cruise Lines. Obviously, it’s we’re seeing a reversal of that, as well Nothing in my optimistic outlook for
not as high as it was pre-pandemic. But as some money coming out of bonds. the long-term prospects of our broad-
it was at a low of $20, and now it’s in There’s also a ton of money still sitting ly diversified portfolio of undervalued
the $70s. This is a lesson to investors on the sidelines that’s looking for a home. stocks has changed as a result of that
who said, “I’m not going to invest in The rotation started last July. In volatility. Volatility is the friend of long-
the cruise-line space because nobody is 2020, a lot of money piled into growth term value buyers, and it can afford
going to cruise again.” stocks; now we’re seeing a reversal of opportunities to take profits when

18 INVESTMENT ADVISOR MARCH 2021 | ThinkAdvisor.com